The offshore sector was given fresh hope last night that a package of tax incentives designed to maintain vital investment will be introduced, despite the collapse in the price of oil.
During a heated Scottish questions in the Commons, Scottish Secretary Jim Murphy dropped a clear hint that Chancellor Alistair Darling is planning to act in a budget which may be delayed until April.
During clashes over the economy which included Tory allegations he is a “do-nothing”, Scottish Secretary Mr Murphy told MPs the UK Government accepts the importance of the offshore oil and gas industry.
He added: “It is crucially important that we continue the investment in the North Sea to access those oil and gas fields that perhaps we have not got to in past decades.
“In particular, there is an enormous untapped resource west of Shetland and we need to do all we can to support the industry to exploit that.”
Mr Murphy was responding to a question from Kincardine and West Aberdeenshire Liberal Democrat MP Sir Robert Smith, who pressed for action to minimise job losses in the industry.
Sir Robert asked what the government was doing “to try and ensure maximum investment in the North Sea in the current credit crisis”.
The remarks followed a warning in the 10th oil and gas survey from Aberdeen and Grampian Chamber of Commerce that three-quarters of North Sea operators expect a reduction in activity this year.
Last night, an Oil and Gas UK spokeswoman said: “Any signal from the government that it is considering bringing forth measures to help stimulate investment is obviously good news for investment offshore and the security of the nation’s energy supply.”
Aberdeen North Labour MP Frank Doran predicted the Budget will contain a package for the North Sea. He said: “Any changes will help keep existing infrastructure in place to be available for further developments which will require access to it.
“Encouraging new investment has got to be a priority for the Treasury.”
Sir Robert said later: “The Treasury needs to deliver the incentives to invest that they are consulting on and we specifically need to see decisions that will unlock the promise of gas and oil from the west of Shetland.”
The attack on Mr Murphy was led by Tory shadow Scottish secretary David Mundell, who said he was leading Scotland “not just into recession but to the brink of becoming the worst-hit part of the worst-hit country in the developed world”.
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